Putin brands Cyprus saving levy as ‘unfair’

The Russian leadership has lashed out at Cyprus’ plan to tax bank deposits. President Vladimir Putin called the initiative ‘unfair’, while Prime Minister Dmitry Medvedev drew comparisons with illegal forfeit.

If Cypriot authorities go ahead with the tax plan and levy every
deposit placed in the country’s banks, it would be “unfair,
unprofessional and dangerous,” Putin said, according to
presidential spokesperson Dmitry Peskov.

The assessment was voiced during a special meeting with senior
economic aides and officials on Monday, in which the situation in
the eurozone and the Cyprus banking crisis were discussed.

The Russian Prime Minister Dmitry Medvedev was even harsher in
his comments. “This looks like a forfeiture of other people’s
money,” he told the RIA news agency, calling the decision
strange and controversial.

The country’s former finance minister Aleksey Kudrin, in his
turn, has blamed the EU and its financial institutions for not
helping the country in time, which has led to the current
crisis.

“The EU and its regulators are responsible for the current
situation on Cyprus. They have slipped up on it,” Kudrin wrote
in his Twitter feed.

Cyprus wants to impose a levy on bank deposits as part of its
plan for a bailout by European creditors. While the proposed
measure provoked local anger, foreign investors stand to lose most
from the scheme if it is enacted.

At the end of 2012, Russian companies had an estimated $19
billion in deposits with Cypriot banks, according to Moody's. This
makes up 25% of all deposits on the island, while 70% are held by
the citizens of the European Union and the United Kingdom.